IP Management:

IPR Primer

Intellectual Property (IP) in E-commerce

IP Issues in the Distribution of Content on the Internet


By World Intellectual Property Organisation (WIPO)



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In recent years, there has been much publicity about the unlawful distribution of intellectual property-protected music, films, art, photos, scripts, and software (“content”) on the Internet. These unauthorized downloads often violate national laws of copyright. Because of the ease with which digital files can be downloaded, unauthorized copying of content has been a major problem causing the loss of millions of dollars in revenue for the owners of these rights.

As an E-Commerce business, it is important to protect your IP rights on the Internet. This can be done in a number of ways. Always clearly identify your content, either with a copyright notice or some other indication of ownership. You may wish to simply tell users what they can and cannot do with your content. Never distribute or permit downloads of third party content that does not belong to your company and put in place programs to make sure that your employees understand your company policies in this regard.

The Napster case in the United States put an international spotlight on unauthorized downloading of music files. The case, which resulted in the court issuing a permanent injunction preventing Napster from operating its file sharing system, was a “contributory infringement” case because the claim was that Napster facilitated illegal copying by users of the system, not that Napster copied the files itself. Other cases will continue to test the law in this area, and there may be different issues and different results in different jurisdictions, but the lesson of Napster is that it is important for an E-Commerce company to make sure it has a clear policy against unauthorized copying of files, or any actions that encourage or facilitate such copying.

It is also important for E-Commerce companies to make sure that employees do not gain access to or keep in their possession or on their systems any unauthorized copies of software or other content. Your company should have a system of prevention, education and monitoring to make sure that employees are not knowingly or unknowingly using illegal copies of software.

All employees should know about the company's policies against misuse of IP, and senior management should be responsible for reviewing company business practices on a regular basis to make sure that the policy is being followed. It is wise to assess situations in which a policy violation is found, to see if disciplinary action should be taken.

Increasingly, some companies are utilizing technical means to protect content on the Internet by watermarking, encrypting or otherwise creating identification and tracking systems. Electronic Copyright Management Systems are being proposed by business consortia and individual companies who see these systems as a way to use technical means to control use of content.

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How can Your SME Benefit from Copyright Protection?